Chevron Wins Injunction In Ecuador Legal Battle

Chevron, the second-largest U.S. oil company, notched a significant legal win on Monday night when U.S. District Judge Lewis Kaplan of the Southern District of New York ruled that Ecuadorean plaintiffs cannot collect some or all of the $8.6 billion in damages they are seeking from Chevron in the U.S. or other countries.

Kaplan raised serious concerns about the legitimacy of the judgment against Chevron issued by a judge in Ecuador in February, the New York Times reported. At issue is alleged pollution committed by Texaco in Ecuador before Chevron (CVX) acquired that company a decade ago.

Kaplan's ruling may put a crimp in plans by the plaintiffs' lawyers to pursue collecting damages from Chevron in locations outside the Central American country. Attorneys for the plaintiffs previously said they thought they would face an uphill battle in collecting damages in U.S. courts, but had also hoped to pursue legal action against Chevron in other Latin American countries in which the company does business.

The lawyers said they plan to appeal Kaplan's decision. Chevron was able to call into question the corrupt nature of Ecuador's legal system, a situation that has worsened since leftist President Rafael Correa took office in 2007, the Times reported.